MTN Nigeria Communication Plc in its Audited Financial Statement for the year ended 31 December 2023 declared loss after tax of N137.02 billion.
The telecom giant reported revenue of N2.469 trillion for the 12 months period, up by 22.69% from N2.012 trillion reported the previous year.
Loss after tax of N137.021 billion was reported for the year 2023 as against the profit after tax of N348.727 billion reported in 2022 financial year.
Earnings per share of MTN Nigeria stands at negative N6.53.
At the share price of N222.9, the P/E ratio of MTN stands at -34.15x with earnings yield of -2.93%.
In light of the negative retained earnings, the board did not recommend a final dividend for FY 2023.
Commenting on the result, MTN Nigeria CEO Karl Toriola stated thus:
“2023 witnessed a very challenging operating environment characterised by rising inflation, currency devaluation and foreign exchange shortages, complicated by geopolitical disruptions and cash shortages in Q1 arising from a redesign of the naira. These factors created severe headwinds for our customers and our business during the year. The inflation rate increased throughout the year, reaching 28.9% in December 2023 – the highest reading in 18 years – with an average rate of 24.5%. This was further exacerbated by higher fuel prices, arising from the removal of the fuel subsidy in May 2023, with the average prices of diesel and petrol up by 66.4% and 257.1% in 2023 to N1,416.8/litre and N600/litre, respectively.
In June 2023, the Central Bank of Nigeria (CBN) adopted a more liberal foreign exchange management system and reintroduced the ‘willing buyer, willing seller’ model. This has resulted in a 96.7% unfavourable movement in the exchange rate against the US dollar from N461.1/US$ in December 2022 to N907.1/US$ (Nigerian Autonomous Foreign Exchange Market (NAFEM) rate) in December 2023. This development contributed meaningfully to the upward pressure on the cost of doing business in Nigeria, and for MTN Nigeria in particular, significantly increased the costs in relation to our tower leases.
Outlook, medium-term guidance
We anticipate a challenging 2024 as we tackle the complexity and ongoing effects of high inflation and elevated forex volatility on our operations. Given the material uncertainty these present in the near term, we have suspended our medium-term guidance for EBITDA margins. We maintain the medium-term guidance for service revenue. In light of the negative retained earnings at the end of 2023, the Board of Directors has resolved not to declare a final dividend for 2023.
Looking forward, we remain focused on sustaining our commercial momentum and accelerating our service revenue growth, improving the profitability of the business and strengthening the balance sheet. Since December 2023, we have progressed constructive discussions with IHS on changes to the existing tower lease contracts that could, if successful, result in improvements that help us mitigate macro risks, including currency. As we execute our strategy, we will continue to invest in the business and unlock efficiencies to drive operating leverage with a focus on reestablishing earnings growth as well as sustaining our strong free cash flow generation and returns.”